Bitcoin Rebounds From Sub-$30,000 Amid Respite in Global Markets

Bitcoin rebounded from a swoon below $30,000 as a selloff in stocks moderated and a bout of calm washed across global markets.

The world’s largest digital token added as much as 5.4% to $32,636.08 as of 7:48 a.m. in London. Ether at one point climbed 6.4%, while coins like Solana and Avalanche were also in the green.

Bitcoin’s earlier plunge had taken it to levels last seen in the middle of 2021. Whether the calm will last is an open question. 

Tightening monetary policy to combat runaway inflation is curbing liquidity, creating a formidable obstacle for speculative assets like cryptocurrencies.

For instance, Michael Novogratz, the billionaire cryptocurrency investor who leads Galaxy Digital Holdings Ltd., warned that he expects things to get worse before they get better.

“Crypto probably trades correlated to the Nasdaq until we hit a new equilibrium,” Novogratz said on Galaxy’s first-quarter earnings call on Monday, adding that investors may see “a very choppy, volatile and difficult market for at least the next few quarters before people are getting some sense that we’re at an equilibrium.”

Bitcoin’s correlation with U.S. stocks is around record levels, and the token pushed higher as S&P 500 and Nasdaq 100 equity futures stabilized and then rallied Tuesday.

The crypto market is also monitoring TerraUSD, an algorithmic stablecoin that aims to maintain a one-to-one peg to the dollar.

The peg appeared to fray, with the token’s value falling below 70 U.S. cents Tuesday before climbing back above 92 U.S. cents.

Do Kwon, the founder of Terraform Labs, which powers the Terra blockchain, is moving to shore up the stablecoin.

Kwon captured the attention of the crypto world earlier this year by pledging to buy as much as $10 billion in Bitcoin to prop up Terra.

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